Newmont Corporation (NGT) shares fell more than 3% Thursday after the world’s largest gold miner reported lower revenue and profit than expected in its first quarter.
Newmont’s revenue came in at $2.87 billion for the quarter ended March 31, an increase of 11% from $2.58 billion in the prior-year quarter. The rise is mainly due to higher average realized prices for metals, partially offset by lower sales volumes. Revenue missed the Zacks Consensus Estimate by 6.86%.
Meanwhile, adjusted net income was $594 million or $0.74 per share in 1Q 2021, an improvement from $326 million or $0.40 per diluted share in 1Q 2020. However, it missed the Zacks Consensus Estimate of $0.75 per share.
The average realized price of gold jumped 10% to $1,751 per ounce in the quarter. Production fell 1.4% to 1.46 million ounces due to the sale of its Red Lake mine and Covid-related disruptions at its Cerro Negro mine.
Newmont President and CEO Tom Palmer said, “In the first quarter we delivered a solid financial performance with $1.5 billion in adjusted EBITDA and $442 million in free cash flow, putting Newmont on track to achieve our full-year guidance with improving production expected in the second half of the year. We remain confident in the strength of our business as we invest in our world-class portfolio, strengthening the balance sheet and sustaining our quarterly dividend of $0.55 per share.” (See Newmont Mining stock analysis on TipRanks.)
Two days ago, J.P. Morgan analyst Michael Glick maintained a Buy rating on the stock but lowered its price target to $75.00 (C$92.21) for a 20.7% upside potential. Glick said in a research note that gold stocks have come under pressure from rising real yields and falling gold prices since the start of the year.
Overall, the consensus on the Street is that NGT is a Strong Buy based on 7 Buys and 2 Holds. The average analyst price target of C$87.99 implies an upside potential of about 15% from current levels.